PESTLE Analysis of Ford reveals that the company can exploit many newer opportunities relevant to the macro-environment.
Political Factors
The political aspects which are influencing the business externally are discussed in this section. The impacts of governmental policies on the working environment of business are considered here. The subsequent given are the political factors influencing the company’s business:
- Political support for innovation and technological advancement (opportunity)
- Influx of global trade treaties (opportunity)
- Infrastructural maintenance and improvement in developing states (opportunity)
The quest of the government to increase innovation and advancement in technology has benefitted the industrial sectors. The aim is to hit new advances which can initiate rapid economic growth, environmental preservation, and long-term sustainability. Moreover, the increasing trade agreements have capacitated the company to exploit markets beyond boundaries. The improved infrastructure is paving way for the smooth operations of the automotive industries. The upgraded transportation facilities enhance the automotive industry to grow its business. These prevailing conditions have given the company an influx of opportunities mainly to grow its customer base. The company must devise a strategy to capture the giant populous markets of the developing nations. Thereby, this segment of Analysis enumerates significant potentials and opportunities in the way of Ford Motors.
Economic Factors
The company gives a comprehensive view of the economy and especially economic indicators. This segment of the analysis reveals the influence of economic conditions on the working of the company.
- Steady growth of US economy (opportunity)
- Growing developing markets (opportunity)
- Strong US dollar (threat)
The company’s biggest market is the US market which is now giving steady indicators for growth over the past few years. Ford, on the other hand, has also had the opportunity to grow in the developing markets as these markets are rising steadily. The company can make profits by ensuring its presence there. Despite the above factors, the strengthening of the US currency, namely the dollar, can pose a significant THREAT AS THE company is operating its operations in the US. The raw materials and spare parts are made there. Moreover, the price of the vehicle is also shown in terms of the US dollar thereby, other countries may find the prices of Ford vehicles unreachable. Thus, the company devises a way to cope with the threat given in this section along with a way to exploit the available opportunities.
Social/Sociocultural Factors
The company is vulnerable to social or socio-cultural factors. These external factors are prevalent in the working environment of the company. The most notable factors analyzed by PESTLE Analysis are discussed below:
- An era of electric or hybrid vehicles (opportunity)
- Ease in customer services (opportunity)
- Rising gap in class and wealth (opportunity and threat)
The company can improve its product by increasing the number of vehicles mainly by introducing hybrid or electric vehicles. These vehicles can potentially increase the revenue of the company. The company has another significant opportunity to increase the company’s growth by ensuring special customer care services. In contrast, the increased health gap can be a threat to the company as the company’s products are mostly luxurious and expensive. Therefore, as revealed in this section, the company’s focus on innovations and devising effective growth strategies can effectively increase the company’s revenue.
Technological Factors
Technologies affect the automotive industries in terms of growth and revenue generation. This segment of the Technological factors of PESTLE Analysis reveals the technological factors prevalent in the external environment of the company. Succeeding factors are most prominently affecting the company’s business environment:
- Mobile computing technology (opportunity)
- Usage of online fulfilment facilities (opportunity)
- Restricted alternatives to fuel stations (threat)
The use of newer services like mobile computing has allowed the company to increase the sphere of its services. These services can be utilized to give services and products to customers online. Whereas the company’s quest to give an alternative or newer fuel vehicle may inflict damage on the company’s growth due to the restricted availability of the other fuel stations. Therefore, this analysis has revealed that the company must improve its delivery service along with improvement in technology so that the company remains competitive and grows its business. may
Legal Factors
Ford must ensure its business is within the legal limits. The impacts of legal regulations are covered in detail in this section. The ensuing external factors are impacting the business of the company:
- Regulations to protect the environment (opportunity)
- Safety Regulatory measurements (opportunity)
- Ensuring Intellectual property Rights globally (opportunity)
The company must address environmental conservatism by enhancing its visions of sustainability. Moreover, the company can improve the design and model of the products to enhance safety concerns. This would increase the customer base. The provision for intellectual property rights can safeguard the company’s ideas and themes. Therefore, Ford has ample opportunities to grow by abiding by these regulations’ framework.
Environmental/Ecological Factors
These factors contribute to the environment of the company. This environment is particularly natural and is covered in this section of the Analysis. These factors are prevalent in the macro-environment of the company, thus contributing significantly to the working of the business. The main factors prevalent are:
- Climate change conscious (opportunity)
- Reduced Carbon footprints (opportunity)
- Oil Reserves Declination (opportunity)
The company can grow its business and brand reputation by ensuring climate-friendly products. In the same way, the company can take advantage of low carbon footprints. For must devise a strategy to exploit these futuristic opportunities. The company must introduce products that are non-dependable on fuel and are dependable on electricity to enhance sustainability. Therefore, this analysis has revealed that the company must ensure innovation and technological revolution to improve its products and therefore, the company’s growth and business.
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